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October 2017

Confidence in UK housing market at five-year low

Published: Monday 30 October 2017

Confidence in the UK housing market has suffered a record fall, dropping to its lowest level in five years.

That’s the main finding of the latest Housing Market Confidence Tracker from the Halifax bank, which reached its lowest level since December 2012.

The survey, which tracks House Price Optimism – consumer sentiment on whether house prices will be higher or lower in a year’s time – dropped 14 points from April 2017 (+44) to October (+30), matching the record fall following the EU referendum result.

Russell Galley, Managing Director, Halifax Community Bank, says, “Housing market optimism has declined significantly over the past year, with almost half of people expecting a general slowdown in the market.

“Even with a potential base rate increase on the horizon, it’s significant that buyers’ concerns continue to be centred on raising deposits and job security and, as such, we do not anticipate that an increase in Base Rate will have a significant effect on the demand for properties.”

The index has fallen by 38 points since the peak of +68 in May 2015, around the time of the General Election.

Half (50%) of those surveyed now expect house prices to rise over the next year, although this is the lowest level since April 2013 (45%). One in five think house prices will fall, the highest since October 2012 (20%).

Despite expectations of a bank base rate rise, possibly as early as next week, an increase is not perceived as the main barrier for people to buy a house (15%). Instead, the ability to raise a deposit (61%) and job security (42%) remain the main barriers, with household finances recording the biggest increase (+7) since the last survey.

Only a third or so (36%) of existing mortgage borrowers show concern about rising interest rates affecting their ability to meet their repayments. This has decreased 6%, down from 42% in 2014.

Housing Market Confidence Tracker asked a representative sample of 1,968 British adults aged 16+ across Britain about their views on property, defined as “houses, flats, apartments and all types of accommodation”.